Shares in Dana Petroleum held their position on the back of a hostile bid by Korea National Oil Corporation (KNOC) after Dana said the s1.87 billion offer "significantly undervalues" the company.

The Aberdeen-based oil and gas company said the offer of 1800p a share was "opportunistic and inadequate."

City analysts said the muted reaction of Dana's shares indicates the market is far from convinced by the company's arguments in favor of a higher offer price. But they added that it will still "stymie" KNOC's efforts to buy shares in the market and quickly take control of the Scots firm.

In a document released to the stock market Dana cited the asset valuation of an independent expert, its own forecasts for oil production growth, details of the acquisition of two new North Sea oil fields plus exploration updates to try and convince the market of its value.

Dana said it would be fairly valued at between 2270p and 2465p a share, and that it sees "major additional upside" after taking into account the new value created from the acquisition and the expert's advice.

Tom Cross, chief executive of Dana, said: "We are expecting a proper value discussion with KNOC. Investors should focus on the value the new information demonstrated, as opposed to the share price in a range of 990 pence and 1500 pence prior to KNOC's approach."

In another stock market announcement Dana provided details of its s240 million acquisition of Petro-Canada U.K., a unit of Suncor Energy Inc, which gives it access to two North Sea oil fields.

It highlighted its belief the company is in a phase of "transformational growth," expecting to boost production to a pro-forma rate of approximately 70,000 barrels of oil equivalent per day, from its 2009 average rate of 38,653 barrels.

Dana said it believes that two wells it is currently drilling - Anne Marie and Cormoran - could, if successful, create considerable additional upside.